RHO-LIKE GTPases have been implicated in the regulation of the actin cytoskeleton which controls the morphology, adhesion and motility of cells(1-3). Like Ras proteins, they become activated when bound GDP is exchanged for GTP, a process catalysed by GDP-dissociation stimulator (GDS) proteins(4). Several GDS proteins specific for Rho-like GTPases have been identified(5-8). Most of these contain a conserved catalytic domain, the DBL-homology (DH) domain(9), and activate Cdc42 or Rho but not Rac(5-8). We have isolated the invasion-inducing Tiam1 gene, which also encodes a protein with a DH domain(10). Here we show that Tiam1 is a GDS protein for Rho-like GTPases in vitro. In fibroblasts, Tiam1 induces a similar phenotype as constitutively activated (V12)Rac1, including membrane ruffling, and this is inhibited by dominant negative (N17)Rac1. Moreover, T-lymphoma cells expressing V12Rac1 become invasive, indicating that the Tiam1-Rac signalling pathway could be operating in the invasion and metastasis of tumour cells.